SB 2044: Dormant Captive Insurance Companies; Gross Premiums Tax; Meeting Requirement; Exemption

A BILL FOR AN ACT

RELATING TO INSURANCE.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  Section 431:19-117, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

     "(c)  A dormant captive insurance company that has been issued a certificate of dormancy shall not:

     (1)  Conduct the business of insurance;

     (2)  Be subject to or liable for the payment of any tax on gross premiums imposed under section [431:19-116;] 431:19-116(a) or any other tax of any character imposed by the laws of this State as provided under section 431:19-116(b);

     (3)  Be required to file audited annual financial statements and other reports required under section 431:19-107; [and]

     (4)  Be subject to the requirement that its governing body hold at least one meeting each year in this State as provided under section 431:19-102(b)(2); and

    [(4)] (5)  Be subject to examination under section 431:19‑108, except for non-compliance with this section."

     SECTION 2.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 3.  This Act shall take effect on January 1, 3000.

Report Title:

Dormant Captive Insurance Companies; Gross Premiums Tax; Meeting Requirement; Exemption

Description:

Exempts a dormant captive insurance company that has been issued a certificate of dormancy from certain taxes and the requirement that its governing body hold at least one meeting each year in the State.  Effective 1/1/3000.  (SD1)

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

A BILL FOR AN ACT

relating to insurance.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

     SECTION 1.  Section 431:19-117, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

     "(c)  A dormant captive insurance company that has been issued a certificate of dormancy shall not:

     (1)  Conduct the business of insurance;

     (2)  Be subject to or liable for the payment of any tax on gross premiums imposed under section [431:19-116;] 431:19-116(a) or any other tax of any character imposed by the laws of this State as provided under section 431:19-116(b);

     (3)  Be required to file audited annual financial statements and other reports required under section 431:19-107; [and]

     (4)  Be subject to the requirement that its governing body hold at least one meeting each year in this State as provided under section 431:19-102(b)(2); and

    [(4)] (5)  Be subject to examination under section 431:19-108, except for non-compliance with this section."

     SECTION 2.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 3.  This Act shall take effect on July 1, 2026.

Report Title:

Dormant Captive Insurance Companies; Gross Premiums Tax; Meeting Requirement; Exemption

Description:

Exempts a dormant captive insurance company that has been issued a certificate of dormancy from certain taxes and the requirement that its governing body hold at least one meeting each year in the State.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.

STAND. COM. REP. NO. 2108

Honolulu, Hawaii

RE:     S.B. No. 2044

        S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Sir:

     Your Committee on Commerce and Consumer Protection, to which was referred S.B. No. 2044 entitled:

"A BILL FOR AN ACT RELATING TO INSURANCE,"

begs leave to report as follows:

     The purpose and intent of this measure is to exempt a dormant captive insurance company that has been issued a certificate of dormancy from certain taxes and the requirement that its governing body hold at least one meeting each year in the State.

     Your Committee received testimony in support of this measure from the Department of Commerce and Consumer Affairs, Hawaii Captive Insurance Council, Brown & Brown, Alakai Global Inc., and Aon Insurance Managers (USA) Inc.

     Your Committee finds that the State is an attractive market for the global captive insurance industry due to its balanced approach to regulatory oversight.  Your Committee further finds that a captive insurance company that has received a certificate of dormancy poses minimal regulatory and financial risk as they are not actively writing insurance.  By imposing fewer requirements on dormant captive insurance companies, this measure would reduce compliance burden for companies while retaining appropriate flexible regulatory oversight.

     Your Committee has amended this measure by inserting an effective date of January 1, 3000, to encourage further discussion.

     As affirmed by the record of votes of the members of your Committee on Commerce and Consumer Protection that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2044, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2044, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Commerce and Consumer Protection,